Social Media Influencers As Promoted Crypto ICOs

  SEC ICO Cryptocurrency

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The US Security and Currency Commission (SEC) actively breaks down on crypto initially coin offering projects and a senior officer said earlier this year that dozens of things are under way. [1[ads1]9659004] The next wave of enforcement from the SEC, stimulated by the recent settlement of professional boxer Floyd Mayweather and music producer DJ Khaled, is expected to be on social media influencers that have promoted ICOs to the public.

When is ICO Promotion a fraud

Authors, YouTube celebrities, Cryptocurrency Review Platforms, publications and many more individuals and organizations can be targeted by the SEC if there is sufficient evidence to prove that a person or organization received compensation from the ICO organizers to promote a token sale without revealing the amount received from an ICO project to the target group.

"Any celebrity or other person who promotes a virtual token or c It is a security that must reveal the nature, extent and size of compensation received in exchange for the campaign," said the SEC last year, stressing that failure to disclose compensation is considered as a fraudulent activity.

On November 28, the SEC followed up on its previous statement and said investors should be aware of celebrities that promote tokens on blockchain. The Commission said:

"Investors should be skeptical about investment advice that is posted on social media, and should not make decisions based on celebrity statements. Social media often impacts payments, not investors, and the securities they use, regardless of whether they are issued using traditional certificates or on blockchain, may be fraudulent. "

If a celebrity obviously promotes an ICO after receiving a payment to do so, and ICO is considered a SEC security, the person may be considered a US Security Officer.

Most ICOs are securities [19659005] Over the past seven months, Coinbase, the largest fiat-to-crypto exchange on the US market, has been working with regulators to list more digital assets on the platform.

In May, Coinbase announced its interest in listing of Stellar (XLM), Cardano (ADA), 0x (ZRX), Zcash (ZEC) and Basic Attention Token (BAT). Fast forward for almost seven months, the exchange has only been able to add three of the five cryptographic curves as it suggested to integrate.

Coinbase has been careful to ensure that a digital resource is not recognized as security by the SEC because in a hypothetical case that an asset listed at a stock exchange is declared a security from the US government ring, the exchange may be punished for illegal distribution of unregistered securities.

On Tuesday, reported that Jay Clayton, chairman of the board, said that the Commission sees most ICOs in the global market as securities:

"We do not think Bitcoin is a security. Many of the ICOs you see and You are talking about they are securities. And if you are to offer or sell securities, you must do so in accordance with our laws. We have cleared that the newer measures further emphasized that our securities laws will apply to the ICO room and whose people To collect an ICO recognized as a security without giving compensation to the target audience, may result in a penalty that is twice as much as possible. as big as the compensation itself, as is the case for Floyd Mayweather who paid over $ 600,000 to receive $ 300,000 to promote three ICOs.

Selected image from Shutterstock.

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